I”d like to introduce you to a man who needs no introduction: Scott Ross.

Scott is a pioneer in this industry who has helped define the pathway of VFX development. His reputation is out there, from harsh to soft, and it's probably all true. To me he's a special, brilliant guy who really gets this business, so I asked him to share his view of the industry as it stands today with us. I gave him carte blanche to say what ever he wanted, and he did. The views expressed here are Scott’s. I agree with much of what he says, but not all. What he has to say is always worth listening to. It will make you think. Read, and make up your own mind.

Scott Ross:

It's been a while since the Visual Effects Society issued its hopeful VES 2.0 letter to the industry. Many on the board of the VES have stated that action is being taken by various subcommittees within the VES and that this is a difficult issue that needs a great deal of research and a strategic plan. I contend that the time to be effective is quickly slipping through our fingers. I believe that the structure of the VES, its charter as well as its management and its board of directors, makes addressing the issues that the visual effects industry faces an impossibility.

The VES is an honorary organization whose charter is to further the art and science of visual effects. However, both art and science need to be well funded for those disciplines to exist. Over 20 years ago, I tried starting a visual effects trade association called AVEC (short for Association of Visual Effects Creators, and French for with). Unfortunately, because of paranoia, the association never really got off the runway. Two meetings were held, but all of the major VFX companies of the day (ILM, Boss, Apogee, Dream Quest) were so mistrusting of each other that AVEC quickly became SANS (French for without).

Years later, Tom Atkins had started making some noise about starting a new visual effects community effort, the VES. I was, at the time, apprehensive about this new organization, fearful that it would not have a business component — which I felt, then and now, is the critical issue facing any industry, particularly ours. I mean, without a healthy and vigorous business climate, any industry is doomed. Lo and behold, the VES board at the time did not want the VES to be involved with business issues.

VES MISSION
The Visual Effects Society is a nonprofit professional, honorary society, dedicated to advancing the arts, sciences, and applications of visual effects and to improving the welfare of its members by providing professional enrichment and education, fostering community, and promoting industry recognition.

I decided there and then that while I love awards shows and honoring great visual effects, I fully understood that visual effects artists and visual effects facilities needed to make money to continue to make great images. Imagery was the heart of our industry, but money was the blood. I decided that the VES, while well intentioned, was misdirected, and so I withdrew my involvement.

At present, and over the last 20 years or so, the visual-effects industry has been managed poorly. The companies that support the men and women that create the outstanding and outrageous images that propel box office on all tentpole movies have been unduly taken advantage of. Dozens of visual effects companies have gone bankrupt, even after creating incredible value to producers, directors and motion picture studios. Profit margins for visual effects companies have been mostly non-existent, even while box-office returns on these effects-laden films have soared.

Recently, Peter Berg (Battleship) has publicly stated that the business to be in is the visual effects business, as the lion's share of tentpole films' budgets goes towards creating visual effects. In the past, I’ve had lots of conversations with directors who feel exactly as Mr. Berg does. It’s hard for a director or a producer to understand that, even though the visual effects component of a film is by far the largest line item in the budget, given the cost structure as well as the deal structure of visual effects, there is rarely any money left to fall to the bottom line. I used to get in conversations with Mr. Cameron, who constantly challenged the pricing structure of Digital Domain (DD). He would be stymied by the fact that DD’s fee was far in excess of his fees — and he was the director, the producer, the writer, the editor and the cinematographer! Despite my efforts, he seemed to not understand that the costs against DD’s fees were oftentimes 90% to 110% of the actual fee. And while I am sure that Jim had expenses as well, they were far less than those of an effects company. Bottom line, Jim could reduce his fee by 50% and still make a profit and still have a back-end upside as well. If DD had cut its fees by 50%, we would easily have gone out of business halfway through production.

The issues facing the industry are complex and lengthy. Visual effects workers face growing problems around benefits, overtime pay, relocation and workload, to name but a few. Visual effects facilities, given their inability to maintain reasonable profit margins, are scrambling to do what they can to stay in business. Those efforts include opening up facilities in low-cost markets, chasing the tax incentives and other subsidies offered by various governments, and cutting labor costs wherever they legally and, at times, illegally can. Much of this desperate maneuvering by the VFX facilities has further exacerbated issues facing VFX workers. Yet 18 of the top 20 box-office megahits are laden with VFX. Something here seems unfair and in need of attention.

Next blog? Scott takes an informed look at globalization and turning things around.